This site uses cookies to store information on your computer. Some are essential to make our site work; others help us improve the user experience. By using the site, you consent to the placement of these cookies. Read our privacy policy to learn more.

New duties on horizon for internal auditors

Even as assurance and compliance responsibilities are expanding for
internal auditors, a significant shift in their strategic duties is on
the horizon, according to a new survey.

More than half (54%) of respondents expect that in the next two
years, internal audit’s primary mandate will be providing stakeholders
with business insights and serving as a strategic adviser to the
organization, according to EY’s Global
Internal Audit Survey 2013.

Less than one-third (28%) of respondents said playing that strategic
role is currently the primary mandate or focus of internal audit. More
than 500 chief audit executives (CAEs) and audit committee members
participated in the survey.

“The clear message from the survey is that internal audit functions
need to stop thinking about themselves as compliance specialists and
start taking on a much larger, more strategic role within the
organization,” Ernst & Young LLP internal audit leader Brian
Schwartz said in a news release. “IA is increasingly being asked by
senior management and the board to provide broader business insights
and better anticipate traditional and emerging risks, even as they
maintain their focus on non-negotiable compliance activities.”

New risks

As strategic opportunities emerge, internal auditors also are
adjusting to new compliance duties, according to the survey.
Globalization has resulted in increased revenue from emerging markets
for many companies, so new regulatory, cultural, tax, and talent risks
are emerging.

Internal audit will play a more prominent role in evaluating these
risks, according to the survey report. Although slightly more than
one-fourth (27%) of respondents are heavily involved in identifying,
assessing, and monitoring emerging risks now, 54% expect to be heavily
involved in the next two years.

The biggest primary risks that respondents said their organizations
are tracking are:

Economic stability (54%).

Cybersecurity (52%).

Major shifts in technology (48%).

Strategic transactions in global locations (44%).

Data privacy regulations (39%).

Survey respondents said the skills most often found to be
lacking in internal audit functions are:

Data analytics;

Business strategy;

Deep industry experience;

Risk management; and

Fraud prevention and detection.

“As corporate leaders demand a greater measure of strategy and
insight from their internal audit functions, CAEs will need to move
quickly to close competency gaps and ensure that they have the right
people in the right place, at the right time.” Schwartz said. “If they
fail to meet organizational expectations, they risk being left behind
or consigned to more transactional compliance activities.”

The challenges of the new lease accounting standard have been pervasive to say the least. In this free, independently-written report, you'll learn effective adoption strategies as well as resources for easing the transition to the new standard.